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Full text of "Sixth and eighth avenue surface railroads in the city of New York [microform]; the city's interest, facts"

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Author: 



Title: 



Sixth and Eighth avenue 
surface railroads in the... 

Place: 

[New York] 

Date: 

[1897?] 



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MASTER NEGATIVE # 



COLUMBIA UNIVERSITY LIBRARIES 
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Sixth and Eighth avenue surface railroads in the 
city of New York; the city's interest, facts. 
[New York, 1897?3 
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SIXTH AND EIGHTH AVENUE SURFACE RAIL- 
ROADS IN THE CITY OF NEW YORK. 



THE CITY'S INTEREST. 



FACTS 



REWOPtm CLUB, 

Committee on 

MUNICIPAL ADMINISTRATION. 



f 



/^ 



INDEX. 






Page. 

Preface 3 

Offers for the Road§ 4 

Bill§ authorizing^ City to acquire Roadi 15 

The Purchase of the Road§ urged 17 

Position of Corporation Counsel 17 

" " CityCiub 18 

" ^' Board of Aldermen 21 

4( a Workingnien 22 

" '' Board of Trade 23 

Suit broujg^ht by a Taxpayer' 24 

Attitude of the Press 25 

Position of The Sun 25 

" " Tiie Tribune 27 

" " The Press 2§ 

" ^^ The Hail and Express 30 

Value of these Franchises 35 

EiCtter of John Harsen Rhoades 35 

Views of a Prominent Lawyer 40 

Views of a Citizen 44 

.i i(, xhe Railroad Commission 49 

Position of the ]?Ietropolitan Company 51 

The City's Options still in Force 53 

-^*> L I b K A K V -^-^ 
OF THB 

REFORM CLUB, NEW YORK. 
CITY AFFAIRS COMMirTEE. 



3 540 



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PREFACE. 



The matter of the reclaiming and sale by the city 
of the valuable franchises of the Sixth and Eighth 
avenue railroad companies has been before the gen- 
eral public only a few weeks and already the dis- 
cussion called forth ; the action of the City Club, 
the Board of Trade, tlie laboring men, the Corpor- 
ation Counsel and the Board of Aldermen in advo- 
cating that the city purchase the franchises, or, in 
the alternative, get what profit it can from the 
franchises ; and the favor and earnestness with 
which these ideas have been received and advocated 
by the daily press, all attest the awakening of the 
public to its interests in these franchises. 

Whatever practical difficulties, if any, may stand 
in the way of the city's exercising its option at the 
present time, there is a strong sentiment that such 
action should be taken at once as will protect the 
rights of the city in its option ; leaving to the future 
the matter of raising the necessary funds. 

In the following pages will be found a compre- 
hensive statement of the present status of the mat- 
ter, with the reasons for and against the city's 
acquiring these franchi^,es, the views of the press 
and of the public, and the action of the various 
authorities and organizations. 



i' 



/ 



THE OFFERS MADE TO THE CITY 

FOR THE ROADS. 

Following the offer of the Third Avenue Railroad 
Company (for terms, see ''Sun'' editorial, p. 25, 
post), came Mr. Braker's bid. His offer is : 

*' Office of H. J. Braker & Bro., 

95 William Street, 

New York City, April 7, 1897. 

To the Mayor, Aldermen and Commonalty of the 

City of New York, 
To the Comptroller of the City of New York, 
To the Commissioners of the Sinking Fund of the 

City of New York. 

Gentlemen. — An examination of the public 
records of this city shows that the city is in a posi- 
tion to dispose of two valuable street car fran- 
chises, to wit, those now being operated by tlie 
Metropolitan Street Railway Company, and known, 
respectivel}', as the "Eighth Avenue Railroad" 
and '* Sixth Avenue Railroad" (the latter includ- 
ing the road operated on Lenox avenue above Cen- 
tral Park). Both of these franchises were granted 
by the Common Council in September, 1851, sub- 
ject to the express condition as to the Eighth 
avenue road that no motive power excepting horses 
should be used below Fifty-lirst street, and as to the 
Sfxth avenue road that no motive power excepting 
horses should be used below Forty-second street, 
and as to both roads that the licensees and grantees 
should surrender, convey and transfer the said 
roads, respectively, to the Corporation of the City 
of New York whenever required so to do on pay- 
ment by the Corporation of the cost of said road 
with ten per cent, advance thereon. 

While up to the present time it may not have 
been incumbent upon the city officials to take any ac- 
tion in regard to these franchises as the successors in 
interest of the original parties have been operating 
them practically in accordance with the respective 



charters, it seems proper at this time that the city 
should exercise its right of re-entry as the parties 
in interest have given notice that they intend to act 
independently of the franchises, and, in direct vio- 
lation of their conditions, intend to change the mo- 
tive power from that to which the franchises ex- 
pressly limit them. 

The initiative, therefore, having come from those 
parties themselves, there can be no adverse criti- 
cism if the city shall step in at this time and exer- 
cise the rights which, by the wisdom and fore- 
thought of the members oi the Common Council of 
1851, were wisely x^reserved. 

Hr. Braker'§ Offer. 

I offer and am prepared to pay the sum of one 
million dollars for each of the above-mentioned 
franchises (taking either or both), to be paid in 
cash on receipt of the proper resolutions, and I 
also agree to convey such franchises or have them 
delivered direct, as the Corporation Counsel shall 
advise, to a railroad corporation to be organized 
so as to comply with the law^ in that respect, the 
incorporation whereof shall be approved by such 
Corporation Counsel, and I agree to accept, or canse 
to be so accepted, such franchises, or either of them, 
subject to conditions as follows : 

Terms of Offer. 

1. That in addition to such sum of one million 
dollars for each franchise, I will pay all sums which 
the city of New^ York will be required to pay to 
the owners of such roads and franchises, represent- 
ing the cost of construction, and ten per cent, ad- 
ditional, as required by said contract of September, 
1851. 

2. (Annual income to city.) That in addition to 
such sums representing the purchase price, there 
shall be paid, as provided by law^, to the city of 
New York, an annual charge equal to three per 
cent, of the gross proceeds for the Jirst live years 
and five per cent, thereafter, but such sum in no 
year to be less than fifty thousand dollars on each 
road. 






6 



3. That the motive power used shall be approved 
by the proper officers of the city of JN'ew York and 
the Board of Railroad Commissioners of the State 
of New York, and siiall exclude steam power. 

4. (Transfers.) That such franchises sliall be 
subject to such provisions as shall be established 
by the city of New York and the said Board of 
Railroad Commissioners as to exchange of pas- 
sengers with any and all connecting street surface 
railways, it being my intention that the said roads 
shall accept tiansfers from all connecting roads 
and to give transfers to all which will accept them. 

I also agree that if such franchises, or either of 
them, are delivered to me, or such corporation 
organized by me, that I will properly indemnify 
the city of New York against any loss or damage 
by reason of its action in so doing, and that such 
indemnity shall be in the form and manner to be 
approved by the Corporation Counsel in the sum 
of at least $50,000 : and I further agree that if at 
any time it shall be adjudged that the city of New^ 
York w^as not authorized to deliver such franchises* 
that neither myself nor my assigns shall have any 
claim or make any demand for damages by reason 
thereof. 

In making this proposition and requesting these 
franchises 1 have endeavored to put a fair and 
proper value upon them and to suggest limitations 
and conditions that will be satisfactory to the city 
and advantageous to the public, and in case any 
question shall arise as to whether such franchises 
should be sold at auction I am prepared to bid the 
above amounts on the above conditions, and if the 
proper officers of the city will advertise the same 
I will forthwith enter into a bond of $50,000 tliat I 
will bid the above amounts on the sales theieof. 

Trusting that my request will receive your favor- 
able consideration, I am 

Yours very respectfully, 

H. J. Brakek." 



Who Mr. Brakcr ■§. 

The Commercial Advertiser of April 17th, says 
of Mr. Braker : 

''The moving spirit in the enterprise is Henry 
J. Braker, a multimillionaire. Mr.* Braker is the 
type of progressive manhood characteristic of 
America. Although only forty-five years, he is 
the director of three gigantic enterprises, the con- 
trol of any one of which would satisfy the ambi- 
tion of an average industrious man. Although 
not a conspicuous figure in the news or the talk of 
the day, he practically has a monopoly of the 
camphor trade of the United States. His firm is 
the largest of drug importers, and he is one of the 
foremost dealers in fertilizers in the country. Not 
content with these financial ahd commercial tri- 
umphs, he has entered the arena of street railroad- 
ing, and his past successes would seem to indicate 
that he will cut no mean figure in the new branch 
of industry in which he has chosen to engage." 



The World of April 8th says : 

"There is every reason to believe that Mr. 
Braker means business. He is a man of large 
wealth, and as senior member of the firm of H. J. 
Braker & Brother, drug importers at No. 95 Wil- 
liam street, is widely known and respected in com- 
mercial circles. * * ^ ^ " Mr. Braker has 
large street railway interests in other cities. 



With Mr. Braker' s offer to the City was sent the 
following letter as a guarantee of JMr. Braker^ s 
responsibility. 

Fidelity and Deposit Company of Maryland, 

33 Wall Street, 

New York, April 7, 1897. 
TotJie Mayor^ Aldermen and Commonalty of the 

City of New York. 
To the Comptroller of the City of New York. 
To the Commissioners of the Sinking Fund 

of the City of New York. 
Gentlemen.— IlIyi^ is to advise you that we are 



8 



prepared forthwith to execute for H. J. Braker, 
either or both of the bonds of $50,000 each referred 
to in his communication of this date to you in 
regard to the purchase of the franchise of the rail- 
roads of the Sixth and Eighth Avenue Companies. 

Yours truly, 

Fidelity & Deposit Company of Maryland. 

H. P. Platt, 

Vice-President. 



m 



IStatcnieiit by €liarle§ Henry Butler, Attorney for 
Mr. Braker, of reasons wliy the otter should be 
accepted. 

7o tlie Mayor Aldermen and Commonalty of the 
City of Neio York. 

To the Comptroller of the City of Beio York. 

To the Commissioners of the Sinking Fund of the 
City of Neio York. 

''Gentlemen.— In submitting to you, on behalf 
of my client, Henry J. Braker, a proposition to 
purchase the franchises for the street surface rail- 
roads, generally known as the Sixth and Eighth 
Avenue Railroads, permit me to briefly state Mr. 
Braker' s position, and the grounds for his believing 
that it would not only be eminently proper, but 
that it is also the duty of the proper officers of this 
city to accept his offer, unless other parties are wil- 
ling to give a larger sum, in which case it would 
-certainly be the duty of the city officials to expose 
the franchises for sale, and so realize for the city 
their actual market value." 



Why mr. Braker's Otter Should be Accepted. 

*'i^/r5^.— The franchises are entirely under the 



9 



control of the city, and the parties now operating 
the railroads on those streets and avenues at the 
present time are practically only tenants at \yill for 
a mere nominal rental (as to keeping certain por- 
tions of the streets in order), and are occupying as 
as it were the premises until the city is prepared 
to re-enter and take possession under the existing 
contract, and then to realize the full actual value, 
which was evidently the intention of the Common 
Council of 1851. 

Second. — The agreement of September, 1851, 
under which both franchises were granted, ex- 
pressly provided that at any time the city could 
re-enter and re-posspss itself of the streets free and 
clear of the tracks on payment to the licensees of 
the cost and ten per cent, in addition. 

By this i^ro vision tlie parties who took the risk 
of building the roads were fully assured against 
loss, and were allowed all they could make from 
year to year so long as the city permitted them to 
use those streets, and they incurred no liability. 
Thus it was a perfectly safe bargain for them, and 
it will be no hardship on them or their successors 
whenever the city should exercise the right which 
the city expressly reserved as a condition for grant- 
ing the favorable terms of the charter. 

The present owners having acquired the roads 
with full knowledge of the condition of the fran- 
chise cannot claim that the city should not exercise 
undoubted right to re-enter, as that was one of the 
risks which they assumed when they acquired the 
stock of the comi)anies operating under the fran- 
chises. The case is exactly the same as though it 
affected private property, and can be compared to 
what is happening every day in this city. 

An owner of a block of property uptown, having 
no present use therefor, permits a vegetable gard- 
ener to occupy it on a monthly lease, at a nominal 
rental. As years go by, the land becomes enor- 
mously valuable, but still the owner does not dis- 
turb his tenant until at last the time comes when 
the land is either sold or improved ; then the ow^ner 
must necessarily ask the tenant to vacate the prem- 
ises ; meanwhile, however, the tenant has sold his 
business to another gardener w^ith notice of the 



I 

1 



^■^mm 



% 



10 



nature of his lease. Can that tenant complain? 
Will any one say that simply because the land has 
been so profitable during these years ; that because 
the rent has been so cheap, when rents of surround- 
ing property were so high ; that because the lot of 
the tenant was so happy that the landlord who had 
been so considerate for so many years must for ever 
forego the full use of his property ? 

Now, that is exactly the position taken by the 
present owners of the Sixth and Eighth Avenue 
Railroads For years they have enjoyed without 
expense the right to operate these railroads through 
the most thickly populated parts of the city of 
New York on condition that they would surrender 
the right so to do whenever the city demanded 
possession and reimbursed them for the actual cost 
and ten per cent, additional. Having taken pos- 
session of a piece of property subject to an out- 
standing option, they certainly cannot complain if 
the holder of the option exercises the right of ac- 
quisition on the terms of which they had due 
notice. 

Third.— This is the proper time for the city to 
exercise its riglit under the contract of 1851, as the 
licensees have themselves, without warrant or au- 
thority, attempted to exercise rights of ownership 
entirely inconsistent with, and, in fact, in direct 
violation of the terms of the existing franchises, 
thus showing an absolute disregard of their obli- 
gation to the city. They propose at this time to 
change the entire nature qf the franchises and to 
use a motive power expressly prohibited thereby 
and subject to which express prohibition the fran- 
chises were granted. 

The initiative, therefore, having come from the 
licensees themselves the city should promptly act 
upon its rights and prevent any possibility of a 
claim being made that by any acquiescence as to 
the proposed changes, either active or passive on 
its part, it has in any way, by implication or estop- 
pel, w^aived the valuable rights reserved in the 
franchises. 

Fourth. — The city has never in any way waived 
any of its rights under the contracts of 1851, and 



11 



a 



its not having enforced the surrender clause up to 
the present time does not in any way operate as a 
waiver of such rights whenever it shall elect to ex- 
ercise them. Up to the present time it has not 
been in a position where it was obliged to act or 
lose any substantial right. The franchises have 
been steadily increasing in value as the city in- 
creased in area and population, and the city could 
afford to wait until the proper time before electing 
to avail of the surrender rights. But the time has 
now arrived when it cannot afford to wait any 
longer. 

1. Because the value is now fixed, and the 
amounts offered are minimum amounts which the 
city is sure to receive, and it is also indemnified 
and saved harmless from all expense, liability and 
damages, and the city is now in a position wiiere, 
by availing of its plain legal rights, it can receive 
for franchise property which is proper for it to 
sell $2,000,000, and an annual income of at least 
$100,000, which is entirely in excess of the amount 
now received. 

2. Because, if it does not now avail of its con- 
tract rights under the agreement of 1851, it will 
probably never be able to do so again. If the mo- 
tive power is changed under color of law% the pro- 
posed expenditure of $8,(K)0,000 will be added to 
the cost, and 10 percent, in addition thereto would 
amount to $300,000. This would practically nullify 
the city's rights, as while it would be feasible (as 
has actually happened) to find a purchaser at an 
advance of a million dollars, plus the cost and 10 
per cent, of the present road, it would probably be 
impracticable to find a purchaser, after the im- 
provements have been made, who would bid the 
present cost, improvements and 10 per cent, on all 
expenditures, in which event the city would lose 
the benefit of a million dollars and hfty thousand 
dollars per annum on each franchise. 

Fifth.— The advantages, however, that will ac- 
crue to the city by accepting Mr. Braker's proposi- 
tion will be far greater than those alluded to which 
are of a pecuniary nature oidy. 

It is as much the duty of the city officials to pro- 



?li 



12 

tect the nghts of citizens as to local transportation 
as It IS to wisely and economically administer the 
city's finances, and there can be lio doubt that the 
franchises which Mr. Biaker offers to accept will 
greatly increase the facilities of local transporta- 
tion. At present there are bat few points of trans- 
ler on either road. No transfers are given to or 
accepted from many of the intersecting and con- 
necting street-surface roads, and the travelino- pub- 
lic are compelled to pay double fares from points 
within short distances. 

At the present moment the demand is essentiallv 
for single fares. The public are entitled to it. 
Street railroad companies are operated on fran- 
chises received from the people, and the people are 
entitled to recognition, and sould not be compelled 
to pay double fare because it so happens thai dif- 
ferent and competing corporations have secured 
intersecting lines. 

Mr. Braker meets this point by agreeing that the 
franchises shall be subject to provisions as to 
transfers that will compel these lines to accept 
transfers from and give transfers to all connectino- 
and intersecting lines on such terms as the Common 
Council and Board of Railroad Commissioners shall 
determine. The fairness of this proposition and 
Its advantage to the traveling public are too appar- 
ent to need any elaboration, and I simply wish to 
add that the clause regarding transfers was inserted 
in the proposition as it is now evident that no new 
franchises either should be, or will be given by 
the i)ublic authorities unless these rights of the 
public are recognized and preserved. 

Sixth.— The city should avail of Mr. Braker's 
offer, as it is so made that the city is relieved of 
all responsibility and liability. If any question of 
liability should arise, Mr. Braker will be obliged to 
bear the expense, and the city will be amply in- 
demnified against all loss ; and, on the other hand, 
if the city IS justified in accepting the offer, it is the 
gainer by $2,000,000, besides an additional annual 
income of at least $100,000 ; that is to say, the city 
has a fortune to gain and nothing to lose. 

Sevent/i. —The offer is not made by irresponsible 



13 



parties or for the purpose of preventing the present 
licensees from carrying on a proposed line of im- 
provements. It is made by a responsible citizen, 
who is amply able to carry out the terms of any 
contract which the city may make with him, and 
who tenders the highest class of security in sub- 
stantial amount that he will fulfill the contract if it 
is made. Under such circumstance I hardly think 
that his offer should be, or will be, refused. 

The city can enforce its contracts with the com- 
panies. 

EigMh. — As to the legal aspects of the j^roposi- 
tion, I have not entered into them at this time, as 
it has been my purpose to present the matter 
purely from a business point of view, and to call 
your attention to the advantages to be gained by 
the city's accepting the offer in that respect, well 
knowing that you would refer the matter for his 
opinion to my esteemed friend, Mr. Scott, in his 
official capacity as Corporation Counsel : and 
knowing, as I do, that his knowledge regarding all 
matters appertaining to city affairs far exceeds my 
own, I shall not attempt to anticipate him in ex- 
pressing a legal opinion as regards this matter. I, 
however, would in this respect call your attention 
to the fact that, so far as the Eighth Avenue Road 
is concerned, the effect of the contract of Septem- 
ber, 1851, and the relations of the owners of that 
franchise and the city, have been fixed and estab- 
lished by a judgment construing the agreement, 
thus making it res acljudicata, and that judg- 
ment has been affirmed by the Court of Appeals, 
putting it absolutely beyond doubt or question. 

The case I refer to is that of the Mayor, etc., 
against the Eighth Avenue Railroad Company to 
recover license fees and was commenced for the 
City by Mr. William C. Whitney, as Counsel to 
the Corporation, in 1881, and the complaint states 
that the contract of 1851 was the basis of the then 
existing franchise (which is now in exactly the 
same condition), the railroad company in its an- 
swer claiming that the Act of May 19, 1874, ex- 
tending the route of the Eighth Avenue Railroad, 
superseded the said contract, and that the company 
was no longer subject to its terms and conditions. 



11 



i 



-««^*«^if>!a<iS«i*^*»« 



14 



but was controlled only by the CTeneral Kailroad 
Act. The Court, however, expressly decided 
otherwise, and a judgment for $43,062 was recov- 
ered by the city for license fees provided for in the 
original contract. On appeal, the then General 
Term of this Department affirmed the judgment 
(48 Hun, 614), and in July, 1889, the cause was 
argued in the Court of Appeals by that eminent 
lawyer, Mr. David J. Dean, by whose recent death 
the city has lost a most devoted and learned advo- 
cate. The points passed upon by the Court of Ap- 
peals, as appears by the briefs of counsel, fully cover 
all that can be raised at the present time, and the 
counsel for the railroad company very ably argued 
the point that the Act of 1874 superseded the con- 
tract of 185h and that the company had acquired 
new rights thereunder which abrogated its liabili- 
ties under the original contract. On the other 
hand, Mr. Dean contended that the Act of 1874 did 
not relieve the company from any liabilities or 
alter its charter as set forth in the contract, and 
that it did not release the company from any 
liabilities, but that, if it had attempted so to do, 
it would have been unconstitutional. 

Mr. Dean especially called attention in his brief 
to the important riglits of the city under the con- 
tract, including that of demanding the surrender 
of the roads and to regulate the motive power, and 
claimed that the Legislature had no power to abro- 
gate those rights, as any attempt so to do would 
be in violation of the Constitutions, both of the 
United States and the State of New York, as it 
would impair the obligation of a contract. The 
Court of Appeals, in affirming the judgment, de- 
livered an opinion (Haight, J., 118 N. Y., 389), 
which fully sustained Mr. Dean on every point, 
and there can be absolutely no question as to the 
city's rights under the contract. 

Ninth. — Inasmuch, therefore, as the city is in a 
position to avail of this offer, and to reap the bene- 
lit of provisions which were so wisely inserted in 
the contracts of 1851, I trust that yoii will favora- 
bly entertain it. Permit me to remain. 

Yours very respectfully, 
Chaeles Henry Butleh, 

Attorney for Henry J. Braker, 
HU2 Broadway, 

Mew York City." 



15 

BILLS AUTHORIZING TH£ CITY TO 
ACQUIRE THE ROADS. 



Senator Ford'M Bill. 

On the 14th instant Senator Ford introduced a 
bill providing that : 

*' The Mayor, Aldermen and Commonalty of any 
city containing 1,250,000 inhabitants or more, ac- 
cording to the last Federal census or State 



enumeration, 
to time 
railroads 
reserved 
tracts or 



are hereby authorized from time 
to purchase any street railroad or 
which such city may have a 
right to purchase under any con- 
agreements, under and by virtue of 
which such railroads were acquired from such 
Mavor, Aldermen and Commonalty or such Board 
of Aldermen and Mayor ; and to pay for said rail- 
roads with the proceeds of bonds to be issued by 
such city under such terms as the Board of Esti- 
mate and Apportionment or board exercising such 
functions may prescribe, and in an amount not ex- 
ceeding the cost of such railroad or railroads." 

The city is authorized bv the bill to maintain 
and operate such roads as it thus acquires or to 
lease them to the highest bidder for twenty-five 
years. This bill has been referred to the Railroad 
Committee." 

Senator PaYey'§ Bill. 

On the 15th instant, the following bill authoriz- 
ing the city to acquire these roads was introduced 
by Senator Pavey : 

Ax Act 

To empower city of New York to acquire and 
operate or lease certain railroads in said city, and 
to provide funds by the issue of bonds and other- 
wise for such purpose. 

Sec. 1. The Mayor, Aldermen and Commonalty 



i^ 



16 

of the City of New York, are hereby authorized to 
exercise the power to purchase the raih'oads of the 
Sixth Avenue Railroad Conii>anv and the Eighth 
Avenue Railroad Company under the terms of the 
agreements executed September 6, 1851, confirmed 
by Ch. 140, L. 1854. 

Sec. 2. The said Mayor, Aldermen and Com- 
monalty are authorized to own and to lease said 
railroads when acquired, and to grant the right, 
privilege and franchise of operating the same ro 
any person or corj^oration for a period not exceed- 
ing twenty-live years ; such grant, at the option of 
the city, to provide for giving to the grantee the 
right upon a fair revaluation or revaluations to re- 
newals not exceeding in the aggregate twenty-five 
years. 

Sec. 3. Said Mayor, Aldermen and Commonalty 
may provide funds with which to acquire said rail- 
roads or either of them by contract with the person 
or corporation proposing to lease said railroads, to 
advance thereon rentals sufficient to equal the 
sums necessary to be paid therefor under said 
agreements, or may provide funds by the issue, 
sale and disposition of bonds of the city of New 
York, bearing interest at a rate not exceeding four 
per cent, per annum and upon such terms as the 
Board of Estimate and Apportionment may pre- 
scribe. Such bonds when issued shall be sold by 
the Comptroller upon the requisition of the Mayor 
and Board of Aldermen. The amount of the bonds 
authorized to be issued shall not exceed the cost of 
the said railroads or either of them to the city un- 
der said agreement. 

Sec. 4. This act shall take effect immediately. 
This bill has been referred to the Cities Committee. 
It is advocated by the City Club. 



17 

THE ACTUAL ACQUIREMENT OF 
THESE ROADS BY THE CITY OR 
THE OBTAINING OF MORE 
REVENUE FROM THEM IS URGED 
BY THE CORPORATION COUNSEL, 
THE CITY CLUB, THE BOARD OF 
ALDERMEN, THE WORKINGMEN, 
THE BOARD OF TRADE, THE DEMO- 
CRATIC LEAGUE OF KINGS 
COUNTY, THE NEWSPAPERS, AND 
BY CITIZENS AND TAXPAYERS. 

Corporation €oun§el Seott iirgei the pa§§age of 
lc|g[i§latioii to the end that the citj may aequire 
the road§. 

The Corporation Counsel, appreciating the great 
value of these franchises to the city,sent, on the 
a 5th instant, the following earnest letter to 
Senator Raines, Chairman of the Senate Railroad 
Committee, to which was referred Senator Ford's 
bill: 

"I am informed that the Hon. John Ford, a- 
Senator from this city, yesterday introduced a bill, 
which was referred to your committee, aiuhorizin<^ 
the municipal authorities of any city containino- a 
million and a quarter inhabitants to purchase a^y 
street railroad or railroads which such city may 
have a reserved right to purchase under any con- 
tracts or agreements under and by virtue of w^hich 
such mil roads were acquired. 

^' This bill is evidently designed to put the city 
of JNew York in a position to take advantage of the 
reservation contained in certain agreements made 
with the predecessors of the present Sixth and 
J^ighth Avenue Railroads, wherein it was provided 
that the city of New York might at any time com- 
pel the surrender, conveyance and transfer to itself 
of each of said railroads upon the payment of the 
cost of construction with ten per cent, advance 
thereon. 



-^■•t^mm^tii^'mgaHm 



18 



19 



(( 



This condition has recently been the subject of 
much discussion, and the question of its validity is 
collaterally involved in certain cases now pending 
in the Courts of this city. Of course, the present 
owners of the valuable franchises involved would 
be loath to part with their property upon the 
terms referred to and suggest many reasons why, 
as they allege, the condition was either invalid 
when made or has since been abrogated or waived. 

''I do not intend at the present time to express 
any opinion as to the present validity of the con- 
dition or as to the any of the numerous reasons 
assigned why it is invalid. Whether valid or not, 
the city of New York has no authority, under any 
existing statute, either to raise the money which 
would be required to repurchase these roads, nor, 
having repurchased them, has it authority to oper- 
ate a street railroad. It is, therefore, impossible to 
bring a direct action, in the nature of a suit, for 
the specific performance of the condition referred 
to, because it is of the very essence of such an 
action that the plaintiff should be able to affirm his 
ability and willingness to comply with his part of 
the contract, and, until we are put in a position 
where we can allege that we are ready and able to 
pay to these roads the ])rice prescribed in the con- 
dition as tlie consideration of the reconveyance, we 
are unable to bring any action to enforce the con- 
ditions. 

'' The franchises involved are of very great value 
and if the city has any claim of right to them the 
Legislature should not hesitate to put us in a posi- 
tion to assert that right. I therefore venture to 
beg of you that your committee will give early and 
favorable consideration to the bill, and I still ven- 
ture to hope that it may not be too late to secure 
the passage of proper legislation to give to the city 
of New York authority to raise funds necessary 
for an acquisition of its rights and to operate or 
lease the roads when so acquired. This will put us 
in a position to enforce whatever rights we may 
have, which, as 1 have explained, we cannot use at 
present." 

Aetive ^^ork by the City Club. 

Almost immediately upon the issuance by the 



Commissioner of Public Works of his consent that 
the Metropolitan Company should put in its new 
electric power on the Eighth avenue line, the City 
Club, by resolution, disapproved of this permit. 

On the afternoon of the 9th instant a delegation 
of the club went before the Mayor and presented 
the following resolution, passed by the club, and 
expressing its position on this question : 

" Resolved, That, in the opinion of the City Club, 
it is for the interest of the city of New York to ex- 
ercise forthwith its right to acquire by purchase 
the property and franchises of said corporations ; 
and 

'* Resolved, That the City Club favors the imme- 
diate introduction and passage of such legislation 
as may be necessary to accomplish that end ; and 

''Resolved, That, upon the acquisition of said 
property and franchises, the city should forthwith 
sell, under the provisions of Section 93 of the Rail- 
road Law, at public auction, to the highest bidder, 
the right to operate said railroads for a term not 
exceeding twenty-five years, with a right to renew 
for a term not exceeding twenty-five years, upon a 
readjustment of the rental." 

Backing up these resolutions was presented a 
letter signed by Dr. E. R. L. Gould, William 
Travers Jerome, Frank J. Goodnow, Horace E. 
Deming and Albert Shaw, composing the Commit- 
tee on Street Franchises, containing a review of the 
subject and the following statements : 

'*We understand that the only obstacle in the 
way of the city's acquiring the property in ques- 
tion at a moderate cost, under the terms of the 
very contracts by which these corporations hold 
their franchises, is the lack of specific authority to 
issue bonds for the purchase price. We have no 
doubt that a request from you to the Legislature 
would bring the requisite authority. We there- 
fore respectfully suggest that you, acting with the 
Corporation Counsel, have prepared and promptly 
sent to the Legislature a bill embodying whatever 



-I 

-■I 



'! 



I 



m 



20 



authority you may need to enable you to protect 
the interests of the cit}^ in respect to these import- 
ant franchises. 

In the past, as is well known, a X)olicy has been 
pursued which has forfeited the possibility of mu- 
nicipal profit from increments in the value of pub- 
lic franchises. If the wiser and more far-seeing 
policy for which you stand had been adopted, not 
only would the original investors have got back 
their first outlay, with a handsome profit, but the 
idty would have received millions of dollars every 
year with which to lighten the expenses of govern- 
ment. 

There is a strong popular feeling, which we be- 
lieve to be well founded, that the present situation 
with regard to the Sixth Avenue and Eighth Ave- 
nue Railroad franchises presents unexpectedly and 
auspiciously an opportunity for you to inaugurate, 
without waiting for the new charter, the sound 
I)olicy of preserving for the city those valuable 
rights which its growth has created and its exist- 
ence makes possible. 

The Club has urged upon the Mayor and the 
Corporation Counsel the further considerations in 
reference to the new privilege, which the Metro- 
politan Company seeks on Sixth and Eighth ave- 
nues, of substituting electric for horse power: 

''1. That any substantial payment that the city 
could properly secure for the greatly increased 
value of the franchises due to the right which it is 
proposed to give, ought to be secured. 

2. That, whatever may be done as to the ap- 
plication of the Metropolitan Company, care ought 
to be taken that any right of purchase which the 
city may have under the express provisions of the 
old contracts between the city and the original com- 
panies, should be carefully guarded. 

The contracts of 1851 expressly prohibit the use 
of any motive power but horses upon a consider- 
able part of these lines. The actual cost of the 
lines, as they stand to day, is trifling, and their 
potential value after the introduction of the un- 



21 



derground trolleys is enormous. 77ie question is, 
therefore, w7i ether the city shall now acquire this 
enormous potential value at trifling expense, or 
whether it shall permit a corporation to reap the 
entire benefit. 

It must be remembered that under the old con- 
tracts, under which the lines are now operated, 
and under which they would continue to be 
operated with the new form of power, the city can- 
not exact any annual ])ayments for the privilege 
of operating the franchises. If, however, the lines 
are now acquired by the city, the way will be open 
for a readjustment upon the most favorable terms 
which the city can exact. 

While the situation may present legal diffi- 
culties, the above statement makes it clear that it 
is for the interest of the community that every 
effort should be made to preserve to the city any 
rights, which it may have in these valuable fran- 
chises. The City Club is of the opinion that the 
X)rinciple of retaining in the city the ultimate con- 
trol of street franchises, which has been wisely em- 
bodied in the proposed Greater New York charter 
and in the platform of the Citizens' Union, should 
be applied immediately in this case. A bill author- 
izing the city to issue the bonds necessary for the 
X^urchase of the roads would afford a ready means 
of accomplishing this end." 



The Stand Taken by tlie Board of 

Aldermen. 

The public-spirited position of the Board of Al- 
dermen is set forth in the following article printed 
in the Herald on the 14th : 

PROBING^ RAILROAD COMPANIES. 

ALDERMEN WANT TO KNOW IF THE CITY HAS ANY 

KIGHTS. 

The Railroad Committee of the Board of Alder- 
men has been considering the proposition that the 



"T'^^^'-m^mm 



II 



22 



€ity should acquire by purcliase the Sixth and 
Eighth avenue railroads. * * * The preamble 
of the second resolution says that in the agreement 
made between the promoters of the roads and the 
city on September 6, 1851, it is stipulated that no 
motive power except horses shall be used below 
Forty-second street on the Eighth avenue road and 
Fifty-first street on the Sixth avenue road. 

The companies have never be^^n released from 
these stipuhitions. The Commissioner of Public 
Works, however, has given the roads permission to 
open the streets for the purpose of oonstr acting 
subway pits to be used for a sub-trolley electrical 
traction system, and no compensation has been de- 
manded lor the occupation of space underneath the 
surface of the streets, which, if paid for at the rate 
of vault permits, would bring the city a revenue of 
$2,000,000 or $3,000,000. 

The resolution requests the Corporation Counsel 
to inform the Board if the consent of the Board is 
necessary before the change of power can be made, 
iind also if the failure of the companies to file the 
statements of receipts and cost of construction of 
(he roads would cause the Courts to declare the 
franchises forfeited. 

Alderman Oakley moved to lay the matter over 
for two weeks, and the motion was finally carried. 

The Deiiiandi of tlie IVorkiiigmeii. 

The attitude of the workingmen is well set forth 
in an article printed in tlie Journal, of April 9tli, 
entitled : 

'' The city should ow^n these roads." 

Mayor Strong urged to secure the Sixth and 
Eighth Avenue lines. 

This was in reference to a hearing given by the 
Mayor to the Knights of Labor and other working- 
mens' organizations in favor of the city's acquiring 
the roads. 

Their ideas were embodied in a memorial which 
declared in part : 

The opportunity presents, in the existing con- 



23 



tracts of the city with the Sixth and Eighth Avenue 
Companies, to avail yourself for the city of the 
rights already existing and declared valid by the 
Court of Appeals. Under these contracts the city 
has the right to acquire the Sixth and Eighth 
Avenue roads on the payment of the cost of con- 
struction and ten per cent, additional. The rental 
at present paid for the use of these franchises is 
about $400,000 per annum. 

For this sum the original Sixth and Eighth 
Avenue Companies have leased to the Metropolitan 
Traction Company their rights and privileges. 
TJiere is iio reason^ in either equity or law, why 
this great sum, equivalent to the interest on 
$13,000,000 of the city bonds, should not he paid 
direct to the city, instead of to a private corpora- 
tion. The sum* required to exercise this option 
and to acquire this revenue for the city is so small 
that it could readily be made by the issue of short 
time bonds, which the rental would cancel within 
three years. 

Mr. Towns, of 'Brooklyn, counsel for the men, 
told the Mayor that the acquirement of the roads 
■was a business opportunity, which should not be 
neglected. 

*' These roads," said he, ''can be purcliased for 
less than $2,000,000, and the city can either sell 
them over again at a great profit to operate them. 
We represent ninety-eight per cent, of the people, 
who neither own real estate nor railroad stock, and 
whose only interest is good service at moderate 
cost." 



:l 



At this hearing representatives of the Association 
for the Public Control of Franchises and of the 
Democratic League of Kings County also advocated 
the purchase of these roads. 

The Board oi Trade declares for revenue to tlie 
city out of its franchises and calls upon the city 
authorities to act. 

Acting on a report of its Committee on City 



4 



■i*Wa«i^Mbd«Bntta^US 



li 



1 

II 



24 

Affairs, the Board, on the 14th instant, declared 
by resolution : 

That it is the dnty of our city authorities to con- 
serve the valuable rights of the municipality for 
the benefit of all, and while treatins: corporations 
justly treat the public interest justly. TTiat the 
time to make this adjustment is now, not after the 
cost has been enormously ehhanced by the change 
of motive poicer throno:h the medium of a con- 
struction company making an enormous profit, and 
we have confidence that our present Mayor, Cor- 
poration Counsel and Commissioners of Public 
Works will do their duty and protect the public 
interest in this important matter. 

That the Committee on City Affairs of this Board 
be and is hereby authorized and instructed to con- 
fer with said authorities and co-operate with other 
organizations to the same end. 

Suit brought by a taxpayer. 

Following close upon the permit granted by the 
Commissioner of Public Works to the Metropoli- 
tan Company to put in its new power on Eighth 
avenue cars came a temporary injunction, ob- 
tained by Eugene Clifford Potter w^ho set up 
in his complaint the contract right of the 
city in the Eighth avenue road and alleo:ed that it 
would be a waste of the city's property if, in spite 
of Mr. Braker's offer for the Eighth avenue line, 
the Metropolitan Company should be allowed to 
burden the road with an expenditure of $ij,000,(K)0 
in changing its motive power ; thereby increasing 
the cost to the city if it should wish to avail itself 
of Mr. Braker's offer. Mr. Potter also alleged 
that the Eighth Avenue Company was bound by 
its charter not to use any power but horse below 
Fifty-first street and it should not be released from 
that contract without giving compensation therefor. 



25 

THE SENTIMENT OF THE PUBLIC 
IN NEW YORK CITY IS REELECTED 
IN THE PRESS WHICH BELIEVES 
AND URGES THAT THE CITY SHOULD 
EXERCISE ITS OPTION OF BUYING 
IN THESE TWO ROADS OR MAKING 
A PROFIT OUT OF THESE FRAN- 
CHISES TO THE END THAT THE 
CITYS REVENUES MAY BE IN- 
CREASED. 



I 



1 



The Sun. 

The Sun, on the 1st instant, spoke as follows in 
an editorial entitled : 

** City Ownership of Street Railroads. 

The decision of the Court of Appeals, affirming 
the constitutionality of the Underground Rapid 
Transit Act, has an important bearing upon the 
war now raging between the Metropolitan Traction 
Company on the one side, and the Third Avenue 
Railroad Company on the other. These two com- 
panies are fighting for the control of the street 
railroad system in the upper part of Manhattan 
Island and in the adjacent territory, and the Third 
Avenue Company, under the generalship of its 
counsel, Edward Lauterbach, has taken the offen- 
sive against the Traction Company, not only in the 
particular field for the possession of which the two 
are struggling, but wherever it can hit its adver- 
sary. 

The Metropolitan Traction Company is lessee of 
the Sixth Avenue and of the Eighth Avenue street 
surface railroads, and desires to change the motive 
power employed on those roads from horses to 
electricity. It has obtained the consent of the 
Railroad Commissioners to the change, against the 
opposition of the Third Avenue Railroad Com- 
pany, but the Third Avenue has now discovered 
another and more serious way of annoying its 



I 
1 



>^'" ^ imm. 



-^-t..^pjsaiK«^4 



Itii 



I 



26 

rival The licenses^riginally granted, in 1851, by 
the Mayor and Aldermen of this city to the per- 
sons who afterwara formed the Sixth Avenue and 
the Eighth Avenue Kailroad Companies, fo lay 
down tracks over the streets now occupied by them, 
botli contained the stipulation that the grantees 
*^ shall file with the Comptroller a statement, under 
oath, of the cost of each mile of road completed, 
and agree to surrender, convey, and transfer the 
said road to the corporation of the city of New 
York, whenever required to do so, on payment by 
the corporation of the cost of said road, as ap- 
pears by said statement, with ten per cent, advance 
thereon." 

Now comes the Third Avenue Railroad Company 
and demands that the city shall exercise the option 
thus provided for, and backs up its demand by 
offering either to purchase the roads at an advance 
of 8500,000 each, on the price at which the city has 
the right to take them, or to lease them at a rental 
often percent, per annum on that price, with the 
addition in either case of live per cent, of the gross 
receipts. As reported to the State Railroad Com- 
missioners in 1895 the cost of the Sixth Avenue 
Railroad was $621,605, and that of the Eighth 
Avenue $665,181. The Sixth Avenue road is leased, 
at present, to the Metropolitan Traction Company 
for $145,000 a year and the Eighth Avenue for 
$215,000 a year, making on a capitalization at five 
per cent-, the value of the Sixth Avenue Railroad 
$2,900,000, and that of the Eighth Avenue $4,300,- 
000. The city would thus get for about $1,400,000 
properties worth $7,200,000, and the price offered 
by the Third Avenue Company is, therefore, en- 
tirely inadequate. It is intended, doubtless, merely 
as a starting bid, upon which an advance may be 
made in due time. 

The question naturally suggests itself, why the 
city has for so many years slept upon its rights 
under its contracts with these street surface rail- 
road companies, and why the lessees of the roads 
have treated as nugatory the agreement providing 
for their sale to th6 city. The answer is that, until 
the Court of Appeals declared that building and 
operating railroads is a municipal purpose, it was 
assumed that the city had no constitutional right 



27 



to buy a street railroad, and, therefore, that it 
could never exercise the option of purchase given 
it by its contract with the licensees of the Sixth 
and the Eighth avenue roads. There may be other ob- 
stacles to its purchasing the roads, of which, no 
doubt, the parties in interest will avail themselves, 
but, on the facts as they now appear, the city has 
the right to become their owner, on advantageous 
terms, and it ought in the interest of the taxpayers 
to exercise it. If it can get for, say $l,400,000,*bor- 
rowing the money at three per cent., properties 
which will bring it in a revenue of $360,000 a year, 
it will make an addition to its income of $318,000, 
which is a sum not lightly to be thrown away." 



The Tribune. 



In the following editorial, printed on the 5th in- 
stant, the Tribune demands that the city should 
get fair compensation for its franchises : 

" How tlie Cily Is ^Vroiig^ed. 

At least one clause in the Greater New York 
charter deserves hearty commendation, even if the 
document contains a great many things which do 
not merit praise. That clauvse forbids the granting 
of municipal franchises and privileges in perj)e- 
tuity. If all the street railways, the elevated roads, 
the gas companies, the ferry companies and other 
corporations had been compelled from the time of 
their origin to pay to the j3ublic treasury equitable 
and adequate compensation for the privileges which 
they have obtained, the municipality would be 
getting payments from these com[)anies running 
far up into the millions every year, the municipal 
debt w^ould be only a quarter of its present pro- 
portions, and the burden of taxation would be far 
lighter than it is. JNo franchise and no privilege 
ought ever to have been granted by the municipal 
authorities or by the Legislature without such con- 
ditions that the city should receive ample compen- 
sation for the grants made. Birt by the employ- 
ment of every sort of improper means, dozens, 



'If 
- ■*■. 
.*■ 
.1 



•y^0iimi&0'm^ 



ill 



28 

scores, even hnndreds. of corporations have been 
plundering this community for a louff series of 
years by using the public streets or other public 
properly of one kind and another without paying 
to the treasury the sums to which the city is justly 
entitled. It would have been only fair and just if 
the gas companies and electric lieht companies 
had been required to furnish all the lights 
needed for public purposes without charge, and 
also to pay into the city treasury a percentage of 
their gross earnings. These companies are allowed 
to tear up the streets and avenues and to lay their 
pipes in our thoroughfares. What return do they 
make to the community for the advantages which 
they possess ? Every one of them exacts from the 
city unreasonable prices for gas and electric light- 
ing when It gets an opportunity to do it. The 
prohts on the capital honestly invested in the gas 
companies, in the street car lines and the elevated 
roads have been prodigious. The city ought to 
have Its fair share of these profits. It has been 
cheated out of almost all that should have come to it 
tor the use of the streets and avenues by these cor- 
porations. And now some of the corporations which 
have been steadily depriving the city of its just dues 
lor many years are impudent enough to be askino- 
lor extensions of vast importance and value with" 
out any purpose of paying the city a satisfactory 
price tor these extensions. Could assurance and 
audacity go further i How much more of wrong 
from these corporations will the citizens endure ^ '' 



The Press. 

The Press, in the following editorial printed on 
the 2d instant, demands that the city assert its 
rights. 

•The Theft of Three Avenues. 



Dr. Albert Shaw has called Mavor Strong's at- 
tention to the fact that the application of the 
Metropolitan Traction Company, for the right to 



29 






change motive power on three great avenues is vir- 
tually an api)lication for new charters for the 
Fourth, Sixth and Eighth avenue lines. The sug- 
gestion may well be heeded. Dr. Shaw speaks 
with an autiiority conferred by the public recogni- 
tion of his w^orks on municipal government. He 
stands almost alone in this tield. 

But no suggestion should have been required for 
action long ago. More than a suggestion should 
before now have proceeded from the Corporation 
Counsel's office. An injunction should have pro- 
ceeded. The question should be now in the Su- 
preme Court. The city should proceed as a citizen 
proceeds when his property rights are attacked. 
He does not w^ait until the damage is done and 
then seek to have its amount assessed by a jury. 
He seeks relief at the moment of the menace. Then 
he gets redress either by Court order or by an ad- 
vantageous settlement. The city's procedure is, as 
in the Third avenue case, to wait until the robbery 
is completed and then set out to recover the goods. 

The Press forestalled Dr. Shaw by some weeks 
in pointing out what the Metropolitan Traction 
Company seeks by its change of motor. It seeks 
to obtain for about $4,000 a year on each of these 
great lines that which it is now glad to pay $200,000 
a year for on its single Broadw^ay line. Within 
less than twenty years it will be depriving this 
municipality of not less than $1,000,000 a year rev- 
enue from these franchises. Yet if the city fought 
for its rights as the citizen fights for his this rob- 
bery would have been stopped by this time. As 
we pointed out at the time the brief of opposing 
private counsel in the hearing before the State 
Railroad Commission fairly bristled with points 
for the city's use. These have been largely added 
to since the offer of the Third Avenue Company to 
lease the lines. They have been so largely added 
to that the indifference of the Corporation Counsel 
is incomprehensible. 

Does the Corporation Counsel's office take it for 
granted that the Supreme Court will, upon a mere 
technical evasion of the Cantor Act, alhnv the per- 
i)etration of this systematic swindle 'i U so, it has 
a pretty poor opinion of the Supreme Court. VVe 



f*;;'-^ : 

r*!*' 

«!*; 



-'f***!**-*^**!^. 



■r 



30 

mnv'.. hL. ®''^'' consider the Metropolitan Com- 
pany s battered position so impervious to attack 
that It would not yield the city's dues if the citv 
presented the points which have beenraised by the 



The IHail aiul Express. 

Tke Mail and Express declares that it is time 
for the city to act. On the 14th instant it argues 
as follows ; ^ 

" The City and the Surface Roads. 

The bitter struggle between the Metropolitan 
Street Railway Company and the Third Avenue 
Kailroad Company for the control of the Sixth and 
ii^ighth avenue lines, now operated by the former 
corporation, has reached a point which makes it 
impossible to longer ignore the tremendous sacri- 
hces the city has made in the past in granting sur- 
face road franchises. It is a matte? of little im- 
portance to the people whether the Third avenue 
defeats the Metropolitan, or the Metropolitan de- 
teats the Third avenue ; but it is of great imnort- 
ance that the city-which is the people^should 
take advantage of any right which the law may 
give It to step in between the contestants, and 
secure its own reserved riirhts. 

Ever since the plan to change the motive power 
on the Sixth and Eighth avenue lines directed at- 
tention to the terms of their franchises, granted in 
lb51, under which it was claimed the city could 
secure possession of the roads on payment of cost 
and ten per cent, in addition, the developments 
have been hot and rapid. The Third avenue has 
pressed tor the taking over of the roads by the 
city and has offered to pay well for them. The 
Metropolitan has held that the city cannot take the 
feixth avenue line, because the road had been sold 
by the original owners, aud that the corporation 



31 

is protected as to the Eighth avenue line by a 
statute passed in 1874, which placed the old com- 
pany under the General Railroad Law, repealed all 
inconsistent acts, and thus deprived the city of its 
option. 

In reply, it is contended on behalf of the Third 
avenue company that the sale of the Sixth avenue 
line must necessarily have been made with all 
original conditions included, and that it was be- 
yond the power of the sellers to nullify the city's 
vested rights, which amounted practically to an 
equity. As to the Eighth avenue line, it is held 
that a Court of Appeals decision, based on an effort 
by the company to avoid the payment of license 
fees for its cars, distinctly stated that the 1874 law 
did not, and could not, constitutionally, impair a 
contract with the city. If this was true of license 
fees, it is equally true of the city's right to acquire 
the property under the conditions stipulated. 

There seems to be little doubt that the city would 
be able to prove in Court its right to reacquisition. 
That this should be done is made manifest by the 
sudden assertion of a value which has heretofore been 
strenuously denied by the parties in interest. 
First we tind Mr. Henry J. Braker— whether act- 
ing for himself or for others is immaterial— offering 
to pay the city for the cost of the two roads, the 
ten per cent, additional named iir the original con- 
tract, and above this total the sum of $1,000,000 for 
each franchise, three per cent, of the gross receipts 
for the first live years and five per cent, thereafter ; 
at the same time guaranteeing that the city's share 
shall be not less than $50,000 on each road in any 
year. 

The Third Avenue Company made an offer of 
$1,000,000 over the cost price, and then to lease the 
roads at a yearly rental of ten per cent, on that 
price and live per cent, of the year's gross receipts. 
Now it is announced that the Tliird Avenue Com- 
pany stands [ready to pay $4,000,000 for these two 
franchises. Meanwhile the aldermen are divided 
as usual, and probably waiting to hear from the 
political powers. 

If these two franchises are worth $4,000,000 to a 
private corporation, they are certainly worth that 
sum, if not more, to the city, and it is the duty of 



II 



> i 



,: 



32 

the city to acquire them if tlie legal right is main- 
tained. To allege confiscation is absurd. The city 
has given away millions upon millions in franchises 
during the past forty years, and the corporations 
which received them, practicallv as a free gift, 
have grown rich from them. The offers here re- 
ierred to are sufficient proof of the proposition 
that with adequate returns to-day frc»m this source 
the city would be relieved of at least one-half its 
general tax burden. 

It is rime for the city to act— not for the purpose 
of municipal operation, but to secure just returns 
and thus relieve the taxpayer of unnecessary bur- 
dens." 

And again on the 16th instant it argues as fol- 
lows : 

•'The City and the Surface Road§. 

Corporation Counsel Scott, in his letter yesterday 
to Senator Raines as chairman of the Senate Rail- 
road Committee, on the subject of city purchase of 
the Sixth and Eighth avenue surface roads, pre- 
sents with admirable clearness the main points to 
be considered and the necessary legal steps pre- 
liminary to definite action. He does noc, it is 
true, pretend to pass upon the validity or invalid- 
iry of the claims advanced by either in the discus- 
sion. He very properly declines to express an 
opinion as to whether the original agreement made 
between the municipality and the companies near- 
ly fifty years ago— that the city might at any time 
reacquire the franchises upon payment of the cost 
of road construction, with an advance thereon of 
10 per cent.— was valid when entered into or is 
valid now ; for, as he says, there are now pending 
in the Courts of this city certain cases in which 
this very question is collaterally involved. 

What he does say, however, is of supreme im- 
portance.. He acknowledges that it is the duty of 
the city to repurchase franchises worth millions of 
dollars, if the right to do so can be established. 
But— and here he reaches the very heart of the 
problem— the city has no authority, under exist- 



38 

ing statute, either to raise the money for a renur- 
chase or to operate railroads after securing rhem 

thP wJ^r'f ^ ^ '-V-* ^"^^ r^P'^rchase-even with 
the right of acquisition established— without the 

mani7ps? 'T^^^ ^^l^J^' ''^'' ^^ '''^ contract Is 
Fnrrl nn w^ "'f ^ ^^'^ embarrassment Senator 
•Fordon Wednesday, and before the penning of 
Mr Scott's letter introduced a bill authorizing^he 
city to issue bonds for the purchase of the roads 
lo meet the second point made, a second biHwas 
introduced yesterday by Senator Pavey empower 
mg the city -to acquire, operale or lease ^^th!se 
roads, and providing also for the issue of bonds 

it is, of course, probable that the Pavey bill will 
be substituted for Senator Ford's measure in com- 
mittee, as the latter would be ineffectual as an 
enabling acl. There is another point, however to 
be cons^idered. ^ Will these ac^s, if passed and 
signed, be constitutional ? This point, it seems to 
us, must depend upon the settlement of the cases 
ZllTJ?''' m which the right of purchase fs a 
collateral issue or upon a new action brought by 
the Metropolitan Street Railway Company with 
this question as the sole issue. The Court of Ad- 
peals, m the case of Ins. Co. vs. Jenkins, 16 N Y 
424, says : i ^^. x., 

'' The Legislature has no judicial authoritv, and 
cannot control the Courts in respect to the con 

statute- '*^^"^'' ^'''^"° ^'^^'" ^'^" declaratory 

Again, in Burch vs. Newburv, 10 N Y S74 tha 
same Court declares : :^ » ^ ^^- ^ ., ^74, the 

'' The Legislature cannot contingently deprive a 
person of property the right to which was perfect 
under prior laws." p'^iicoi, 

There is little doubt that the defendant corpora- 
tion would leave no stone unturned to retain such 
valuable property as is now the subject of discus 
sion. VV hatever may be the decision in the pend- 
ing cases however, there exists no valid reason for 
delay in (he Legislature, in view of the near nn 
proach of final adjournment. The PaveT biU 
should be put through will all speed consistent 



;i 



■4 






f5 



34 



with decency. Then let the the test be made. The 
city should not be left helpless in the event of the 
establishment of its right to act. The importance 
of covering every point in advance has already been 
made suflSiciently clear. 

The interview with Lawyer William C. Trull, 
who is justly reg?irded as an expert, published 
yesterday by the Mail and Express^ contained 
figures which are irrefutable. They show that the 
offer of $4,000,000 made dy the Third Avenue Com- 
pany for the Sixth and Eighth avenue lines, if re- 
acquired by the ciry, large as it sounds, is still in- 
adequate. They show that in its street railway 
franchises, whether already granted or not, the 
city possesses an asset which should pay for a 
considerable portion of the city improvements, and 
lessen materially the burden of direct taxation. In 
its water front and its docks, the city has another 
possible asset which, if utilized to the utmost, as 
in Liverpool, would alone almost pay the annual 
budget. Under an administration which spends 
the city moneys honestly and economically our 
citizens are waking up to a realization of the hither- 
to latent resources of the municipality. The city 
railway franchises constitute one of the most im- 
portant of them. 



A 



85 

GREAT VALUE OE 
ROADS TO THE CITY. FACTS 
AND REASONS WHY THE CITY 
SHOULD EXERCISE ITS OPTION 
OR MAKE NEW TERMS WITH 
THE COMPANIES. 

statement of Facts by John Har§en Rlioadcs. 

In the following strong letter printed in the 
Tribune on the 17th instant, Mr. Rhoades shows 
that the city should derive great revenue from these 
franchises : 



*6 



lVRO]\OIS TO THE CITY. 



THE STREET RAILROADS' EFFRONTERY IN DEMAND- 
ING FRANCHISES FOR NOTHING. 



John Harsen Rlioades Gives Reasons Why Hand- 
some Revenues Should Be Expected from the 
Traction Companies. 

To the Editor of The Tribune : 

^/r.— Upon my return to the city after an ab- 
sence of some weeks, my attention has been called 
to an editorial in your paper of the 5th inst., en- 
titled ''How the City is Wronged," and, as a 
citizen, I wish to thank you for the strong and very 
able manner in which you have presented the facts 
in relation to franchises in our public streets, 
granted by the Legislature and confirmed by the 
city authorities ; for the principles enunciated are 
sound to the core and should be repeated in every 
journal until the rights of the people are respected 
by our legislators and local public authorities. 

I have nothing to do with, nor do I care for, the 
controversy now existing between the Third Ave- 
nue Railroad and the Metropolitan Street Railway 
Company, which owns and operates practically all 



^41 




Al 



f: 

J 

.r1 



'Tr^»«*«ft' 



I! 1^ 



36 

the surface railroads in tlie citv except the Thinl 
Avenue road ; nor do I care for the efforts being 
made to substitute other motive power than elec- 
tricity. In the end, some compromise or purchase 
will be made which will stop the %ht. but which, 
unless the people bestir themselves, will leave the 
public as unprotected as it now is. But I do care, 
and every citizon should care and protest against 
the authorities giving away valuable franchises 
without receiving adequate compensation for the 
gift. 

I agree with your statement that if the street 
railroad and other corporations which have made 
money out of franchises lawfully gr inted and law- 
fully exercised in the streets of this city had been 
compelled to pay to the city fair compensation for 
the privileges granted them, the city would be ob- 
taining revenue running up into millions every 
year, and the municipal debt would be much less 
than at present, while the burden of taxation would 
be far lighter than it now is. 

This statement of yours, it seems to me, is es- 
pecially pertinent at the present time. The Metro- 
politan Street Railway Company is, and has been 
for the last six weeks, trying to obtain without 
compensation the most valuable franchises, prob- 
ably, that can be obtained in the city. I refer to 
the applications it is making to the various local 
authorities for permission to change forty-five miles 
of its road on Sixth, Eighth and Ninth avenues, 
and Fifty-ninth street into electric roads. As they 
stand to-day, these roads are among the best pay- 
ing properties in the city. When equipped and 
operated by electricity, a far cheaper method of 
traction, undoubtedly their value will be greatly 
increased. The Sixth and Eighth avenue lines, 
figuring on the rents which the Metropolitan Com- 
pany pays for them, represent a combined ca[)- 
italization variously estimated at from seven to 
eight and one-half millions of dollars. I under- 
stand that the total cost of the Eighth avefiue road 
is $1,6(J0,000, in round numbers, and tliat the en- 
tire cost of the Sixth avenue line is $1,700,0(^0, in 
round numbers. 
When these roads received their franchises from 



37 

• 

the city, they agreed that at any time the city, by 
paying the cost price, with 10 per cent, additional, 
could have the option of buying them in. These 
franchises were acquired about forty years ago, 
when almost nothing in the way of compensation 
was asked from street railroad corporations for 
their franchises. The result is that to-day they are 
earning profits undoubtedly far beyond what the 
local authorities in those early days imaorined they 
could ever earn. But the city receives hardly any 
more revenue than it did at the date when the'char- 
lers were granted, while the roads have increased 
ten-fold in value. 

The Sixth avenue company agreed with the city 
that it should not have the power to operate its 
roads by any power other than horse below Forty- 
second street. The Eighth avenue company agreed 
also not to use power other than horse below Fifty- 
first street. As to these two roads, then, the Metro- 
politan company is asking and expecting to get for 
nothing most remarkable franchises. On the Ninth 
avenue and Fifty-ninth street lines it merely seeks 
permission to change from horse to electric power, 
but on the Sixth avenue and Eighth avenue lines it 
is seeking to be relieved from its contract not to 
use other power, and for the privilege of using 
electric power. 

Agreements sucdi as these made by the Sixth 
avenue and Eighth avenue roads with the city must 
be binding, and undoubtedly the roads are 'bound 
by their contracts until released by the city. In 
effect, therefore, the Metropolitan company is ask- 
ing, as to these two roads, for absolutely new fran- 
chises. Already it has obtained the consent of one 
authority, the Board of Railroad Commissioners, 
and only a few days ago, with but little opposition, 
it applied to the second authority, the Commis- 
sioner of Public Works, for his consent to these 
new rights which it seeks. And already the Com- 
missioner has given his consent as to one of the 
lines, namely, the Eighth avenue, though a tax- 
payer has nullified this consent by getting an in- 
junction restraining its taking effect 

This situation makes especially pertinent your 
statement that no franchise and no privilege ought 



I- 







■""M-sr . '^-^iT'^ -"y^ji^p! ^m^mM 



ii i 



38 

ever to be gninted except on condition that the cifv 
receive ample compensation for the crrants made 
1 Ills IS a common-sense, good business and iustic« 
to the taxpayer. And, indeed, wh v should the city 
surrender its property and ri-hts in the streets 
without compensation, and that, too, ample com- 
pensation? ^ 

The construction of these new lines of road will 
mean that through about forty-five miles of our 
city streets this company will appropriate a section 
of the soil about hve feet wide and two feet deep 
1 his property will not be acquired to be enioved 

these old franchises, the company will ^et the rio-ht 
in perpetuity. It seems to me that there can hardl v 
be a more valuable right acquired in this city The 
city obtains in the aggregate a large sum for the 
rental of the space under its sidewalks, which it 
leases for vault purposes to tlie property-owners 
along the streets The compensation for the city s 
land leased for vault purposes varies from 80 cents 
to $2 a square foot. As a matter of fact, ^2 is uni- 
formly charged, and if this company should nay 
rent for the space-some 1,1()(),0()() square feet-i't 
asks in the streets, the city would receive into its 
treasury more than $2,300,000. And the difficulty 
which the Rapid Transit Board has in gettino- the 
consents of property -owners on Broadway south of 
the City Hall for rights which would interfere with 
the vaults owned by these private proi)erty-owners 
and the reluctance with which thnse men surrender 
their rights, show how valuable they consider 
them. *^ 

Then why should the city gram, or why should 

any private corporation expect to get for its own 

beneht, such a valuable right as this in our streets ^ 

lliese roads yield their owners good profits on 

stocks representing far more than the actual cost 

of the roads. In the case of the Thirty-fourth 

street road, running from Sixth avenue co^Lexino- 

ton avenue, $1,000,000 bonds have been issued 

representing far more than the cost of the road' 

based upon the bond issue alone. Why should 

the Metropolitan Company complain if, in return 

lor these privileges, which will so greatly increase 



39 



the value of its property, it be compelled to pay 
the city nor only as much as property-owners along 
the lines of our avenues and streets are obliged to 
for the use of sidewalk vaults, but a liberal tax for 
the use of the highway itself? 

Judging by the experience of the past, what 
protection in the future can the public expect '( Is 
the roadway between the tracks to be kept in 
better order than at present ? Are cars enough to 
be run to prevent the overcrowding which now 
exists ? Is the speed to be regulated to the point 
of safety to the pedestrian ? Are the cars to be 
operated at moderate speed ? Are the tracks to be 
kept free from sanding in summer and salting in win- 
ter, and the piling up of snow on each side of the 
track during a snowstorm ? And are the fares to 
be lessened to the point of a 50 per cent, annual re- 
turn to the stockholders, based upon the actual cost: 
of the roads themselves ? In other words, are the 
taxpayers and the public to receive no benefit what- 
ever from the proposed change ? 

Without much thought, and generally for selfish 
reasons, property owners along the routes of these 
railroads are giving away their rights under a form 
of an agreement which utterly deprives them of all 
^ redress if the proposed changes prove an unmiti- 
gated nuisance and a serious detriment to the value 
of their property. Will this condition of things 
never end ; and are the pubic to suffer forever from 
the assumption by these corporations of rights 
which would not be tolerated for an hour in any 
civilized city in Europe, or the exercise of which, if 
usurped by a private individual, would be stopped 
forthwith ? 

The charter for a greater New York has passed 
both houses of the Legislature, and will undoubt- 
edly soon become a law. By this charter the debt 
of the city is to be greatly increased, and the bur- 
den of taxation will fall heavily upon all owners of 
real estate. By the operation of great natural 
laws, which no human ingenuity can overcome, 
this increased burden of taxation must fall upon 
those the least able to bear it. Is it not full time, 
therefore, that the x>ublic should be aroused to ex- 
isting conditions and insist that those in authority 






"^^t^:^-^ <^ aciqs^^^^^ 



it^iiMiMii^ 



M 



40 

shall refuse to give away franchises for nothing 
which might easily be made to return a large reve- 
nue to the city treasury ? 

John Harsen Rhoades/ 

]^ew York, April 14, 1S97. 



Estimated profit of «4.00O,O00 in Sixth and Eiffhth 
avenue roads. 

The following article in the Maf'l and Express 
of the 15th instant sets forth the value of these 
roads to the city. The article is : 

" Sbould City Own ? 



Profit of $4,000,000 in Sixth and Eighth Avenue 

Roads. 



Change of Motive Power. 



Prominent Railroad Lawyer Gives Some Figures 
and Points Out How the City Would Profit 
Largely by Securing These Franchises. 

The publication in The Mail and Express on 
Monday of a prominent railroad lawyer's reply to 
John D. Crimmins's contention that the Act of 
1874 had destroyed the city's right to bid in the 
Eighth avenue* road and that a change in the 
ownership of the Sixth avenue line had worked a 
like abrogation of the city's right in the premises 
has aroused a great deal of interest. The prospect 
is that out of the sharp discussion . which has been 
precipitated by the action of the Good Government 
clubs, the Citv Club and the labor organizations 
in demanding that the city acquire the leases of the 
roads, some decisive move will be made, and that 
the ciry will profit largely thereby. 

The fact that Mr. Crimmins, in his interview in 
Tlie Mail and Express last week, declared his in- 
ability to understand how the city could benefit by 



41 



acquiring the franchises, has prompted William C. 
Trull, a lawyer of high standing and a recognized 
expert in railroad matters, to furnish The Mail 
and Express with a statement to-day which has an 
Important bearing upon the controversy. Mr. 
Trull said : 

** You ask me for the figures showing that the 
city could make a profit on the purchase of the 
Sixth and Eighth Avenue Railroad Companies. 

" Now, every one knows that the contract with 
the city under which these railroads are operated 
provides that they shall file with the Comptroller 
a statement, under oath, of the cost of each mile of 
road completed, and that they agree to surrender 
and convey and transfer the said road to the cor- 
poration of the city of New York whenever re- 
quired so to do upon payment by the corporation 
of the cost of said road, as appears by said state- 
ment, with ten per cent, advance thereon. 

PROFIT OF $3,000,000. 

*' If any one will take the cost of the roads as 
shown by their own report to the State Board of 
Railroad Commissioners for the year 1895, he will 
find that the total cost of the Eighth avenue road, 
including its real estate and equipment, is 
$1,661,277.77, and that the total cost of the Sixth 
avenue road according to its report for the year 
1895, including its real estate and equipment, is 
$1,778,133.28, so that the cost of either of these 
roads to the city w^ould not be as much as 
$2,000,000. 

"The Eighth Avenue Railroad Company receives 
from the Metropolitan Street Railway Company a 
net rental of $215,000 a year, which capi talized at four 
per cent., would represent more than five millions 
of dollars. Here is a clear profit on the Eighth 
avenue road of $3,000,000. 

*' Now, tne Sixth Avenue Railroad Company re- 
ceives a net rental from the Metropolitan Street 
Railway Company of $145,000 a year, which, capi- 
talized at 4 per cent., would represent more than 
$3,500,000, showing a clear profit to the (;ity, if it 
took the road, of $1,500,000. So you see it is clear 
that under the terms of the contract the city could 



i 






% 



: ■—M..: 



i( t 



42 

acquire the roads of the Sixth and Eighth Avenue 

A^A nnn^ Companies at a profit of at least $4,- 
000,000. ' 

*' I know that the officials of the Metropolitan 
Company say that the city ought not to acquire the 
roads. Of course, they say so because it would 
terminate their profitable leases. The taxpayers of 
the city, however, feel differently. They say the 
city ought to acquire the roads and so increase the 
revenue of the city and dimiuish their burdens 
When they say this they ask a very pertinent 
question, and that is, which of the members or par- 
ties interested in the Metropolitan Company would 
hesitate to avail themselves of a privileo-e in any 
contract between them and the city by which thev 
could get a like profit ? ^. 

City Should Own. 

**I don't believe, nor do you believe, nor does 
any one believe, that there is a man in the city of 
New York who would wait a minute before he 
availed himself of the privilege the city has if he 
had It. It IS no use for any one to say that it is not 
good policy for the city to own railroads The 
Kapid transit Act and the new charter have settled 
that question by providing for such ownership I 
know that the city officials seem indifferent about 
this matter, but the why and the wherefore of that 
inditterence no taxpayer can understand 

''Ex-President Cleveland said : ^ Public office is a 
public trust.' If this is so, the officials of the city 
having the right to act, ought to act at once; lust 
as quickly lor the city as if they were to ffet the 
profits themselves. Yes, and quicker, too, tbr thev 
ought, as trustees, to be more jealous and careful 
of the interests of the public than of their own 

*• You ask why there is all this opposition to the 
Metropolitan Company changing its motive power 
I here is no opposition to the change of motive 
power. The opposition is to such change without 
making compensation to the city. 

No Pay for Privilkges. 

''The proposed change of motive power will give 
the Metropolitan Company exclusive occupation of 



43 



some 1,188,000 square feet of the public streets which 
it does not now occupy. When they get that space 
they will have it forever. That company guaran- 
tees the city for similar rights in Broaaway south 
of Fifteenth street $150,000 annually, which, capital- 
ized at 4 per cent., represents more than $3,500,000. 
The company don't propose to give a cent for the 
new space they are trying to get, and so it is that 
the taxpayers complain and cry out. and some pub- 
lic spirited ones commence suits. They ask why it 
is that whenever they want a cistern in the street 
or a vault in the street they have to pay $2 per 
square foot for it, when the Metropolitan Railway 
Company can have 1,188,000 square feet for noth- 



ing. 



*' They say that the Metropolitan Company can 
better afford to pay $2 a square foot than they can, 
for the reason that the rights the Metropolitan 
Company get would be forever, while all the^' get 
is simply a revocable licence. They say that if the 
Metropolitan Company should pay the same as they 
(the taxpayers) have to pay, that is $2 a square 
foot for $1,188,000 square feet, the City Treasury 
would be benefited $2,876,000 and their own bur- 
dens as taxpayers would be lightened. 

It is reported that the Mayor has said thai he i» 
not going to take any action in the matter and that 
the Corporation Counsel says he don't see how he 
can. The Commissioner of Public Works grants 
permits to use electricity on Eighth avenue south 
of Fifty-first street, although he knows that by its- 
contract with the city the company has agreed not 
to use anything excepting horse power south of 
that point, and that if he had insisted on their ob- 
serving their oontract they would have to go to the 
city for its consent and then would have had to 
pay compensation or else not have been released 
from their contract." 






4 



€oiniiieiit§ of a Citizen. 



In a letter printed in The Sun on April 7th, a 
citizen gave his view of the situation as he be- 
lieved it existed at that time. The letter is : 



44 



(» 



SHALL THE CITY BUY THE ROADS. 



Reason Why the City Should Buy the Sixth 
AND THE Eighth Avenue Surface Roads^ 
The Unexplained Inaction of the Author- 
ities. 

rJ^ ™^ Editor of the SuN-6Yr ; In the pub- 

lic-spirited editorial on -City Ownership of Street 

tM ZnH' Pf ^^^hed in your paper on the 1st o 

this month, after pointing our that the city has an 

opportunity of buying in the Sixth and the Ei 'hth 

avenue railroads and operating them at a dean 

year y profit of $318,000, you afgue that ihe ci?v 

should acquire these roads, and ask : - Why has 

the city for so many years slept upon its rights 

under its contracts with these street surface rail 

road companies, and why have the lessees of the 

roads treated as nugatory the agreement providing 

for their sale to the city V ^vium^ 

Permit me to say that the answer is not, as you 
suggest, doubt as to the right of the citv to buv 
these railroads The true answer is the supine n^ ■ 
difference of the authorities-State and city -and 
their disinclination to move in this matter. Here 
are the facts : 

Six weeks ago the Metropolitan Street Railway 
Company controlling and operating 190 miles of 

IZl^ T ril'^?^' i"i^^« ^ity, went before the 
State Board of Railroad Commissior.ers and ask«d 
the board s consent to the substitution of electricity 
lor horse power on about fifty miles of its roads 
l^or this consent, which would practically amount 
to the grant of new franchises and would greatly 
increase the value of the rights of the owners of the 
lines, this railw^ay company offered no compensa- 
tion ; nor did the board suggest that any compen- 
sation be paid for these valuable rights Counsel 
for organized labor supplied to the board a list of 
367 points in this city where this company per- 
sistently violates the law by refusing to give trans - 
ters over Its connecting owned and leased lines 
and argued tliat the board should not grant any 



45 

privileges to this company until it showed a willing- 
ness and intention to comply with the law in the 
matter of transfers. To this argnment the board 
paid little attention. While it is true that the 
Board of Railroad Commissioners is limited in its 
power of couplins; conditions with its consent to a 
change of motive power, it would seem to have 
been most natural for the board to have given this 
company to understand that new privileges would 
not be granted, gratis, to a company oersistently 
derelict in its duty to the travelling public. 

This board is char^^ed with supervisory powers 
over the railroads of the State. It cannot grant its 
consent to a change of motive power, but it can 
withhold such consent. Would the owner of 
private property, who had granted for a small con- 
sideration valuable rights in his property, extend 
any new privileges to its grantee, if it violated its 
duty, not only to the grantor, but also to weaker 
persons, as to whom the grantor stood in the capa- 
city of a guardian^ Within three days after the- 
hearings of these applications were closed the 
board granted its consent to the use of these new 
franchises. 

Again, at these hearings counsel for a rival street 
railway corporation, acting, doubtless, in self-in- 
terest, showed to this board that, as you say in your 
editorial, by the terms of the original grants to the 
Sixth and the Eighth avenue railroad companies^ 
whose roads the Metropolitan Street Railway Com- 
pany leases at yearly rentals of $145,000 and $215,- 
UOO respectively, the city could buy in these roads 
at only 10 per cent, advance on tlieir cost of con- 
struction. Counsel urged that the transformation 
of these two roads into electric roads would greatly 
increase their value ; that this transformation 
would probably be made the occasion for increas- 
ing the bonded indebtedness of these two lines ; 
that electrical equipment and bonding these 
roads would make their '' cost of construction " 
far greater than the original cost of construction^ 
and that, should the city see tit to buy these roads 
as they stand to-day, inexpensive but exceed- 
ingly valuable horse-car lines, it could get them, 
at a good bargain. It would be obliged to pav 




>> ■"'W^ ■ - '--^W- "J^'^m^'!^^^, 



m 



46 

nincli more after their transformation, and hence 
counsel urged that these new i)rivileges should 
not be granted as to the Sixth and the 
Eighth avenue lines. To this argument, also, the 
board paid little or no attention. Without condi- 
tions, save general ones as to compliance with the 
laws and conditions as to speed, did this board 
grant to a company, which already controls nearly 
<^very mile of street surface railroad in this city, 
the further franchise of constructing electric rail- 
roads over nearly fifty miles of the city's streets. To 
be sure, the consent of this board is not a complete 
grant to this company of the right to construct 
such roads. The permits of several local author- 
ities, namely, the Commissioner of Public Works, 
the Common Council, the Park Department, and 
the Board of Electrical Control, must also be secured 
before such valuable rights can be obtained without 
•compensation by a private corporation. But this 
board said in efllect : '' So far as we are concerned 
you can have these franchises for nothing." 

The next step toward securing these new fran- 
chises was an application made some ten days ago 
by the company to the Commissioner of Public 
Works for his permission for the construction of 
these new and improved roads. Able counsel, ap- 
pearing for the Metropolitan Street Railway Com- 
pany, asked this custodian of the city's interest in 
the public streets for his permission to excavate 
therein. In form it was an application for permis- 
sion to dig up the streets. In reality it was a bold- 
faced request by this applicant for new franchises in 
fifty miles of streets— franchises asked for and ex- 
pected to be acquired without the payment of a 
<;ent, comparatively speaking. Here, again, counsel 
<'alled the attention of the Commissioner to the 
present great value and the enhanced future value 
of tiiese lines of road, and laid before the Commis- 
sioner the facts stated to the Board of Railroad 
Commissioners, namely, that the permission should 
not be granted as regards the Sixth and the Eio-luh 
avenue lines, in view of the fact that these fran- 
chises could be acquired at so great a profit to the 
«ity. 

The attitude of the Commissioner thus far in this 



47 



matter is surprising. The press quotes him as say- 
ing that he did not see how any action of his could 
estop the city from asserting whatever rights it may 
have in the*^matter of acquiring these franchises, 
and that the city's interest would not be prejudiced 
by his granting his consent. It is true, the condi- 
tions which the Commissioner can couple with his 
pernjit are few, but need he surrender so weakly ? 
It seems hardly possible that the sober second judg- 
ment of the Commissioner and of the able Deputy 
Commissioner can allow them to grant their con- 
sents before the citizens have had a second chance 
to be heard in this matter. 

In striking contrast to this mysterious indiffer- 
ence of the Railroad Commissioners and the Com- 
missioner of Public Works is the action of the 
Board of Aldermen, which appears next in this 
play of the railway company for these valuable 
franchises. The Board of Aldermen, by its rail- 
road committee, learning of the city's rights in the 
Sixth and the Eighth avenue railroads, and alive to 
the city's interest therein, have informed the Com- 
missioner of Public Works of the facts in the case 
and have requested him to delay action pending an 
investigation of the advisability of the city acquiring 
these roads. This report is expected daily, and it 
seems hardly possible that a second local authority 
can give its consent while the city fathers are in- 
vestigating with a view to buying the property. 

Then comes the Third Avenue Railroad Company 
and offers in writing, first, to buy these two roads 
from the city and pay therefor the cost of construc- 
tion and $1,000,000 cash in advance thereon ; and, 
second, to lease these two roads at a yearly rental 
of ten per cent, on that price, besides live per cent, 
of the gross receipts. 

Then comes the Corporation Counsel. Instead of 
suggesting ways by which the city can secure these 
franchises', keen lawyer that he is, he fairly bristles 
with objections. The reason why the city cannot 
buy these two roads, the Cor[)orati3n Counsel says, 
is that it has not the money and has no way of get- 
ting it. In answer to it comes the statement in 
your issue of the 3d instant, that a bill is even now 
being prepared authorizing the city to raise the 



<•■ a 



M 



48 

funds necessary. Fnrtlier. even if the city could 
raise the money ti.e Corporation Counsel says it 
c^n buy them, no n.atter what change comes over 
the lines True, but the city at the present time, 
betore the enormous cost of electrical equipment 
has been added, ran buy these properties, worth 
as you say, $7,0()(),()0a for about $],400,0()(). But 
If the city waits until after the Metropolitan Street 
Kailway Company is allowed to burden these roads 
with costly improvements, encrjneered by itself, and 
with heavy bond issues to meet the cost of the im- 
provements, then the city will be obliged to buy 
the roads at a much higlier cost and at a corre- 
spondingly decreased profit to itself. 

This is not a time for discovering difficulties, but 
rather of seeing how the rights and interests of the 
municipality and of the citizens can best be con- 
served ; how best the benefit of these valuable 
franchises can be obtained by the city for the bene- 
fit of the citizens. As you well sav, if only bv 
leasing out thesp roads the citv can m^ake a yearly 
proht otm8,m), why should not such revenue 
be turned into the treasury? 

What the city can and should get from the sale 
or Its franchises is seen in the recent sale of the 
Aingsbridge extension to the Third Avenue Rail- 
road Company. This franchise was sold to this 
latter company on condition that it pay therefor 
some thirty-eight per cent, of its gross earnings. 
:^or the privilege of putting in a cable system on 
Broadway for the short stretch of rokd from 
Union Square to the Battery this Metropolitan 
fetreet Railway Company was willing to pay to 
the city the sum of $150,000 annually-a small 
iraction, indeed, of its net earnings. Further this 
company is not asking for a mere cliange 
ot motive power, for in the original grants to 
tiiese tvvo companies it was expressly agreed that 
below Forty-second and Fifty-first streets re- 
spectively they should have the right to operate 
their cars by no power except horse power. 
iJierelore they are asking not for a change, but 
lor an absolutely new franchise, namely, a fran- 
chise for electric roads. There can be no doubt 
tliat If these franchises were sold at auction 



49 



as the law now prescribes that all franchises 
must be sold, handsome bids would be 
made for these privileges. And this company 
asks these rights for nothing. Is it not time for 
the city to bestir itself to save what it can of the 
revenues to be derived from its railroad fran- 
chises? Now is the time to act before the chance 
is gone. 

*'ClTIZEX." 

Reply of the Railroad €oiiiiiiig§ioii. 

To "Citizen's" letter, insofar as it related to 
the Railroad Commission, the following reply was 
made in the Su?i on the day following. The reply 
is: 

THE CITY AXD STREET RAILROADI^. 



At^^ Explanation from the Chairman of the 

State Railroad Com3iission. 
To the Editor of the Sun : 

Sir — An individual .who j)refers to hide his 
identity under the signature of "Citizen" airs 
himself somewhat gaudily in the Sicn of to-day in 
a communication occupying a full column of your 
editorial page, under the title, " Shall the City Buy 
the Roads?" It is not my purpose to occupy 
your valuable space, nor would it be proper for 
me, as a State officer, to enter into the bitter con- 
troversy between the Metropolitan Traction Com- 
pany and the Third Avenue Railroad Company, 
involving the right to buy, seize, own and operate 
surface railways in the city of New York. It is a 
struggle in which millionaires are arrayed against 
millionaires in gigantic warfare for the posses- 
sion of franchises worth millions of dollars, and 
from which it is to be hoped great benefits in 
the form of rapid transit facilities may be de- 
rived for the metropolis. Certainly there is no 
greater problem, no greater need, now before the 
people of this great city. 






M 



M 



li 



50 

I take no risk, however, in asserting that '' Citi- 
zen " is either grossly ignorant or wilFully un- 
truthful and malevolent in seeking anonymously 
to asperse the State Railroad Commission for its 
action in granting permission to the Metropolitan 
Traction Company to change the motive power on 
the Sixth, Eighth and Ninth avenue and the Fifty- 
ninth street surface railroads. It never has been 
within the jurisdiction of the Railroad Commission 
to sell franchises for the construction of railroads, 
either in cities or other portions of the State, 
nor is it the business or the function of the board 
to make recommendations to municipalities on 
the subject of the prices at which thev shall sell 
francliises. Such matters are all provided for by 
existing laws. If ^'Citizen" was ignorant of this 
fact, he was presumptuous in parading that ig- 
norance, and if he knew it, but nevertheless sought 
in his covert way to impugn the action of the Rail- 
road Commission, his position is only the more 
contemptible. I do not believe ignorance to be his 
greatest fault. Regarding his puerile fling at the 
prompt action of the Commission in granting the 
permits, it is x)erhaps sufficient to say to the people 
of New York city that the Railroad Commission 
believes that they urgently. need improved and ex- 
tended rapid transit facilities, and that the only 
officer of the municipality who appeared before 
the board during the several days occupied in 
hearing the application was the Commissioner of 
Public Works, who officially urged prompt action 
by the board, whatever its decision might be. And 
the >S'^^7i, which not only ''shines for all," but al- 
ways strives to be the fair representative of public 
opinion, urged in one of its brief but vigorous edi- 
torial paragraphs that the Railroad Commission 
should not merely act promptly on the application, 
but that it should act favorably thereon. 

The only question before the board, or of which 
it had jurisdiction on the application, was that re- 
lating to the system of motive power. The board 
has no power to determine questions of legal 
right— these are expressly reserved to the courts 
of law. Regarding the alleged failure of the 
Metropolitan Traction Company to give transfer 



' 



61 



facilities at all proper transfer points on its lines, 
that question had no relation to the case before 
the Board, but is the subject of a separate charge, 
and will be heard and determined by the board at 
an early date. 

So far as the right of the city to recover the 
charters of the Sixth and Eighth avenue roads is 
concerned, the right, if it exists, is not in the least 
hampered or impaired by any action of the Rail- 
road Commission. The city may begin its action 
to recover these franchises within twenty-four 
hours and before work is begun by the traction 
company ; it could have begun suit for that pur- 
pose at any time for forty years past, or within the 
past few weeks during which this subject has been 
fretting '' Citizen." Finally, the subject is one 
well worthy of the manly thought and effort of 
every public-spirited citizen, a fair guerdon for 
battle in the open. No man should be content to 
be a bushwhacker in such a cause, or write on the 
question under a pseudonym, 

Very truly yours, 

Ashley W. Cole, 
Chairman of the Railroad Commission. 

New York, April 7. 



t3 



\m 



Tlie Position of the Metropolitan Company. 



The following interview with John D. Crimmins 
printed in the Mail and Express on the 9tli instant 
defines the attitude of the Metropolitan Company. 
The interview is : 

*' After a conference with Mayor Strong to day 
John D. Crimmins, who is recognized as the ruling 
local spirit in the Metropolitan Street Railway 
Company, announced that under an act of the 
legislature passed in 1874 the city lost whatever 
right it had in the franchise of the Eighth avenue 
road. So far as the Sixth avenue line is con- 
cerned, Mr. Crimmins added, it was his conviction 
that the citv had lost its right to buv in that road. 
He said that he was anxious to have the whole 



'^■'~"^^*«^^'-^^^ - 



fl 



52 

matter fought out in the Courts and settled for all 
time. 

*/My interest in property in this city," said Mr. 
Crimmins to a Mall and Express reporter, *'is 
much greater than my interest in railroads. I have 
the welfare of the city at heart. Anything which 
tends to enhance the financial standing of the city 
appeals to me. For that reason I think I can talk 
on this railroad matter without being accused of 
selhsii motives. 

For no Public Good. 



u 



The proposition has been made that the city 
buy the Eighth and Sixth avenue roads. Now, 
how could such purchase benefit the people? If 
the Sixth avenue road were purchased, it would 
form a line only from the Park, south. There 
could be no transfers, because only roads under 
one management issue transfers. The same can be 
said of the Eighth avenue line. As they are run 
to-day, the public get a maximum of accommoda- 
tion at a minimum cost. Why, when you take 
our transfers into consideration the average cost of 
a fare on our lines is only a little more than three 
cents. 

''The Metropolitan Street Railway Company 
does not own the Sixth and Eighth avenue roads 
We simply lease them. The Metropolitan Com- 
pany does not own a share of stock in the Sixth 
avenue line. These roads are owned by the stock- 
holders of the companies which had been operating 
them. Nothing could be gained by the public if 
the city should take possession of the roads. In 
fact, the city and the public would be the losers 
thereby. 

''I believe that attention has never been called 
to the fact that by an act of the legislature of 
1874, the city lost the right to buy the Eighth 
avenue road. Look up that law. It provided for 
an extension of the road to the Maccomb's dam 
bridge, and placed the corporation under the 
general railway act, at the same time I'epealing all 
inconsistent acts." 

"lam satisfied," continued Mr. Crimmins, '^that 
this act will be construed by the Courts as meaning 



53 



that the city lost its right to buy in the charter. 
You will observe that the act placed the Eighth 
Avenue Company under the general law relating to 
railroads, and that the third section repealed all 
acts in contravention of this one. 



1 



The Sixth Avenue. 

" The case with the Sixth avenue road is different, 
but I am convinced that the Courts will hold that the , 
city has no claim upon that either. The Sixth 
avenue road was constructed by a number of 
capitalists under an agreement with the city. 
The city w^as to have an option on the 
road. But the city never took advantage 
of the option. Later the road passed out 
of the hands of its builders into those 
of another company. Now, if I give a man an 
option on a piece of property, and if he fails to 
take advantage of the option, can he claim the 
property from another man to whom I have sold it ? 

" Whatever the merits of the case may be I would 
like to see the whole matter fought out in the 
Courts. Let us have a final settlement. 

The eity's options on the Sixth and Eig^hth avenue 
roads are still In force. 

A complete reply to the Metropolitan's conten- 
tion that the Sixth and Eighth avenue options are 
now void appeared in the Mail and Express on 
the following day, the 10th instant. This article 
is as follows : 

'' A railroad lawyer who read the statement of 
Mr. John D. Crimmins, printed exclusively in The ' 
Mail and Express of Friday evening, to the effect 
that an old law passed by the Legislature of 1874 
deprived the city of its right to buy in the Eighth 
avenue surface railroad, said he didn't agree with 
Mr. Crimmins. ''I was interested," said he, ''in 
Mr. Crimmins' s statement that he believed the at- 
tention of the public had never been called to this 
law of 1874. I examined the authorities, and, 
curiously enough, found that the Court of Appeals 
had, in an action brought by the Mayor against 



54 



t 



il 



il 



this very Eighth Avenue Railroad Company, de- 
cided Mr. Crimmins's point against him. 

'' This Eighth avenue road, I find, was incorpor- 
ated away back in the early 50' s, and when it got 
its rights it agreed to pay a license fee of fifty dollars 
a year for each car. The company paid these 
fees up to the year 1874. Then this law that Mr. 
Crimmins refers to was enacted. As Mr. Crim- 
mins correctly stated, this law placed the railroad 
company under the general railroad act, and at the 
same time repealed all inconsistent acts. Perhaps 
Mr. Crimmins can explain why it was neces- 
sary to place the Eighth Avenue Company under 
the general railroad act when it was incorporated 
under that act, and so, of necessity, must have 
been subject to its provisions. He may do this. I 
cannot. 

The City'i Suit. 

*' After the passage of this act the railroad com- 
pany claimed that by being placed under the rail- 
road law and by the repeal of all inconsistent acts 
it was relieved from the obligation to pay the 
license fees. Consequently it refused to pay them. 
Then the city sued the company. 

" This case reached the Supreme Court ten 
years ago, and that Court decided that- the act of 
1874, which Mr. Crimmins thought he uncovered, 
did not relieve the road from its contract with the 
city, and that it had to pay license fees just the 
same. The Court said that if this act had been in- 
tended ro let the road off from its contract the law 
would have been unconstitutional, because the 
Legislature could not impair the contract with the 
city. 

'' Of course the compau}^ appealed, and three 
years later, 1890, the Court of Appeals affirmed the 
decision of the Supreme Court and said just as 
emphatically as did the lower Court that the con- 
tract with the city was still binding in sx)ite of the 
law of 1874. 

" Wlien the company got this franchise from 
the city it agreed to sell its road to the city when- 
ever the city should want to buy it. Now, the 
agreement to sell its road whenever the city wanted 



-ifl 



55 



to buy it is just as much a contract as the agree- 
ment of the company to pay a license fee of fifty 
dollars for each car. They are both contracts, and 
the Legislature could not by any act break the 
contract with the city. So you see that the city 
has got just as good right to buy the road now as 
though this act of 1874 had never been passed. 

"And the chances are very good that Mr. Crim- 
mins's desire, expressed in the Mail and Express^ 
to have this whole matter fought out in the Courts 
will be gratified." 



The Sixth Avenue. 

When The Mail and Express man asked the 
lawyer what he thought of Mr. Crimmins's argu- 
ment that the city had lost its option to buy in the 
Sixth avenue road because that road had been sold 
by the original owners who made the contract with 
the city, the lawyer said he didn't believe that 
would stand any better than the argument as to 
the Eighth avenue road. 

'' You see," said he, " when the promoters of 
the Sixth avenue road got their franchise they 
agreed to sell the road to the city at any time. 
That was a condition imposed upon the company. 
Whoever bought the road necessarily bought it 
condition and all. The owners, by selling the 
road, could not deprive the city of its chance to 
buy. The condition to sell traveled right along 
with the franchise all the time and is good to-day. 
I see Mr. Crimmins says he does not see what 
good the public would get by building this road. 
It seems to me that the fact that another railroad 
company offered the city $1,000,000 for its option 
on the two roads, and that Mr. H. J. Braker 
raised this otter to $2,000,000 for both franchises, 
is pretty good evidence that the city could get 
something out of them by buying the roads and 
selling them. If any one will give the city 
$2,000,000 of property for the privilege of baying 
these roads there certainly must be something in 
it for the city to sell them." 



REFORM CLUB. 

Committed on 

MUNICIPAL ADMlNISTt^AnON. 



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